Garcia Vs BOI Sec 19 of Art 2

CONGRESSMAN ENRIQUE T.
GARCIA (Second District of Bataan), petitioner,

vs.
THE BOARD OF INVESTMENTS, THE DEPARTMENT OF TRADE AND INDUSTRY, LUZON
PETROCHEMICAL CORPORATION, and PILIPINAS SHELL CORPORATION, respondents.
FACTS: The case at bar is a petition to annul and set aside the decision of the Board of Investments (BOI)
/Department of Trade and Industry (DTI) approving the transfer of the site of the proposed petrochemical
plant ( Bataan Petrochemical Corporation- BPC formed by Taiwanese investors) from Bataan to Batangas
and the shift of feedstock for that plant from naphtha only to naphtha and/or liquefied petroleum gas (LPG).
This is a continuation of the previous case of Garcia and BOI wherein, the petition was granted (see notes for
the detailed resolution) However the main issue lies when one of the major investor A. T Chong of the BPC
desires to amend original registration of its project by changing its job site from Limay, Bataan to Batangas.
The reason being that, Batangas had unstable labor situation and also the presence of the LPG depot owned
by the Phil. Shell Corporation to support the transfer of source from naphtha to LPG. The court ruled in favor
of the investor due to the lost of interest of the petitioner when called for the hearings, which the court deems
as a waived of rights in the decision. However petitioner then filed motion for reconsideration in order to
solve issue of whether or not the investor has right of final choice of plant site. The resolution dated on
January 17, 1990 ruled that the investors are subject to the approval of the BOI, therefore the authority of the
plant site resides in the sovereign of the government through BOI because it is thorough the BOI to
determine whether the study could be of beneficial to our country, hence the BOI has the last word on the
'final choice' of plant site. But, petition for motion for reconsideration was still denied, however a minority
composed of Melencio-Herrera, Gancayco, Sarmiento and ponento voted for grant of motion for
reconsideration, hence this case.
ISSUE: Whether or not the BOI (Executive Branch) committed grave abuse of power in complying for the
transfer of the plant site
RULING: Yes. The BOI in complying for the transfer of plant site not only violates Constitutional rights
mentioned in Section 1 Article XII of the Constitution provides that:
The State shall promote industrialization and full employment based on sound agricultural development and
agrarian reform, through industries that make full and efficient use of human and natural resources, and
which are competitive in both domestic and foreign markets. However, the State shall protect Filipino
enterprises against unfair foreign competition and trade practices.
But also of Section 19 of Art II of the Constitution that provides:
The State shall develop self-reliant and independent national economy effectively controlled by Filipinos.
By allowing the transfer, it places the Philippines to different disadvantages naming a few:
1. In order to accommodate the transfer, it is necessary to buy real estate properties in Batangas, and the
land precisely reserved for the petrochemical zone in Limay, Batangas under P.D 1803 will not be of use.
furthermore,the respondents have not shown nor reiterated that the alleged peace and order situation in
Bataan or unstable labor situation warrant a transfer of the plant site to Batangas. Certainly, these were
taken into account when the firm named itself Bataan Petrochemical Corporation. Moreover, the
evidence proves the contrary.
2. Instead of using naphtha produced by a 60 %Filipino owned company BRC ( Bataan Refinery
Corporation) as a feedstock for the plant, it will use LPG which is scarce in the Philippines and in need of
importation, which will affect our dollar reserves. Another is that, naphtha is exempted by law of ad valorem
tax (RA 6767)which in effect makes naphtha cheaper that of LPG which is not exempted of ad valorem tax
and is imported.
In the light of all the clear advantages manifest in the plant's remaining in Bataan, practically nothing is
shown to justify the transfer to Batangas except a near-absolute discretion given by BOI to investors not only
to freely choose the site but to transfer it from their own first choice for reasons which remain murky to say
the least.
The Court, therefore, holds and finds that the BOI committed a grave abuse of discretion in approving the
transfer of the petrochemical plant from Bataan to Batangas and authorizing the change of feedstock from
naphtha only to naphtha and/or LPG for the main reason that the final say is in the investor all other
circumstances to the contrary notwithstanding. No cogent advantage to the government has been shown by
this transfer. This is a repudiation of the independent policy of the government expressed in numerous laws
and the Constitution to run its own affairs the way it deems best for the national interest. Thus, the petition
for motion for reconsideration is GRANTED. The decision of the respondent Board of Investments
approving the amendment of the certificate of registration of the Luzon Petrochemical Corporation (formerly
BPC) on May 23, 1989 under its Resolution No. 193, Series of 1989, is SET ASIDE as NULL and VOID.
The original certificate of registration of LPC in February 24, 1988 with Bataan as the plant site and naphtha
as the feedstock is, maintained.
Notes/ Additional Information:
Resolution of the first case of Garcia vs BOI
WHEREFORE, the petition for certiorari is granted. The Board of Investments is ordered: (1) to publish the
amended application for registration of the Bataan Petrochemical Corporation, (2) to allow the petitioner to
have access to its records on the original and amended applications for registration, as a petrochemical
manufacturer, of the respondent Bataan Petrochemical Corporation, excluding, however, privileged papers
containing its trade secrets and other business and financial information, and (3) to set for hearing the
petitioner's opposition to the amended application in order that he may present at such hearing all the
evidence in his possession in support of his opposition to the transfer of the site of the BPC petrochemical
plant to Batangas province. The hearing shall not exceed a period of ten (10) days from the date fixed by the
BOI, notice of which should be served by personal service to the petitioner through counsel, at least three (3)
days in advance. The hearings may be held from day to day for a period of ten (10) days without
postponements. The petition for a writ of prohibition or preliminary injunction is denied. No costs.
The case also mentioned of Judicial Power. In which another issue may be mentioned:
Issue: Whether or not the case is subject to judicial power.
Judicial power includes the duty of the courts of justice to settle actual controversies involving rights which
are legally demandable and enforceable, and to determine whether or not there has been a grave abuse of
discretion amounting to lack or excess of jurisdiction on the part of any branch or instrumentality of the
Government.
Ruling: Yes, there is an actual controversy whether the petrochemical plant should remain in Bataan or
should be transferred to Batangas, and whether its feedstock originally of naphtha only should be changed to
naphtha and/or liquefied petroleum gas as the approved amended application of the BPC, now Luzon
Petrochemical Corporation (LPC), shows. And in the light of the categorical admission of the BOI that it is
the investor who has the final choice of the site and the decision on the feedstock, whether or not it
constitutes a grave abuse of discretion for the BOI to yield to the wishes of the investor, national interest
notwithstanding.
The Court has a constitutional duty to step into this controversy and determine the paramount issue.

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CONGRESSMAN ENRIQUE T.

GARCIA (Second District of Bataan), petitioner,

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